The National Pension Commission (PenCom), under the leadership of the Director-General, Omolola Oloworaran, has been working round the clock to deepen pension penetration across the country.
In September this year (2025), the Commission issued new guidelines allowing Nigerians in the diaspora to make pension contributions in US dollars.
This laudable initiative also allows Foreign and Nigerian workers in Nigeria earning in foreign currency to remit pension contributions in foreign currency.
The guidelines were tailored to guide Licensed Pension Fund Operators (LPFOs) on how to accept, effectively manage and invest foreign currency contributions by eligible Retirement Savings Account holders, under the Contributory Pension Scheme (CPS).
This was done not only to expand pension inclusion to more workers across the globe, but to also boost the nation’s FX reserves, and safeguard the integrity and transparency of the pension system.
According to the guidelines, RSA holders can make daily, weekly, or monthly pension contributions at a frequency that aligns with their earning structure.
The guidelines said the contributions shall be divided into two, explaining that 60% shall be the contingent, available for withdrawal, while 40% shall only be withdrawn at retirement for pension. Adding that the contributions would be kept in the RSA for a minimum of six months before withdrawal.
According to the guidelines, RSA Contributors living in diaspora shall open a Non-Resident Nigerian Ordinary Account (NRNOA), in line with Central Bank of Nigeria (CBN) requirements and shall remit pension contributions from their NRNOA to the foreign currency collection account of the Pension Fund Administrator (PFA) with the Pension Fund Custodian (PFC).
The guidelines said the RSA Contributors resident in Nigeria shall open Domiciliary Accounts (DA) with the Collecting Bank of the PFC appointed by the PFA and shall remit pension contributions from their DA to the foreign currency collection account of the PFA with the PFC.
The guidelines added: “Contributors shall remit pension contributions from their DA to the foreign currency collection account of the PFA with the PFC.
“Contributors shall indicate their Personal Identification Number (PIN) in all transfer instructions regarding the remittance of contributions.
“The collecting Bank of the PFC shall not charge any fee on foreign currency contributions.
“Notwithstanding the provisions above, contributors who receive salaries in currencies other than the USD are eligible to contribute. However, they will be required to remit their contributions in USD.”
The guidelines further explained that a Nigerian RSA holder who moves abroad can retain his RSA subject to updating his RSA with the documentation requirement specified in Section 3.0 of the guidelines. Adding that the RSA holder’s contribution in foreign currency shall be credited to the appropriate foreign currency Fund.
Acknowledging the Money Laundering Prevention and Prohibition Act 2022, the guidelines stated that the PFA/PFC shall ensure that all foreign currency contributions exceeding $10,000 are reported to the Nigeria Financial Intelligence Unit within 24 hours from the date of receipt.
The report, according to the guidelines, shall indicate the nature and amount of the transfer, the name and address of the sender of the funds and any other relevant information that the NFIU may need.
It said the PFA/PFC is to ensure that suspicious foreign currency contributions are reported to the Nigeria Financial Intelligence Unit for investigation in line with the powers of the Unit as stipulated in Section 3 of the Financial Intelligence Unit Act, 2018 and Sections 37 – 40 of the CBN’s 2022 Regulation on Anti Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions.
It stated that all RSA opened pursuant to the Guidelines are exempted from the provisions of the Regulation for the Transfer of Retirement Savings Account.
The guidelines specified that Foreign currency pension contributions shall be invested in line with Section 85 of the Pension Reform Act and Regulations and Guidelines issued by the Commission to ensure safety and fair returns. Noting that the Board of Directors of the PFA shall approve the investment policy of the foreign currency fund.
According to the guidelines, the General Principles under Section 2.0 of the Regulation on Investment of Pension Assets issued by the Commission shall also apply to the investment of foreign currency contributions.
The guidelines detailed that the PFAs shall invest foreign currency contributions within Nigeria in line with allowable investments set out by relevant provisions of the Regulation on Investment of Pension Fund Assets issued by the Commission.
Saying that in line with Section 1.50 of the Regulation on Investment of Pension Fund Assets, the Board Investment Strategy Committee of the PFA shall formulate the internal investment strategies for investments in the foreign currency fund, which the Board shall approve. Adding that investments of foreign currency contributions shall be executed and retained in foreign currency (USD).
Notwithstanding the above, the guidelines said the PFAs can invest the foreign currency contributions in Naira-denominated instruments. However, the currency risk must be mitigated through currency futures executed on a CBN recognised exchange or other CBN approved hedging instruments.
The guidelines also said that all the investments in foreign currency financial instruments shall be valued in Naira at the prevailing market rate on a CBN recognized exchange in line with the Regulation of Valuation of Pension Fund Assets. Noting that all interests, dividends, profits, investments, and other incomes accruable to pension funds and assets shall not be taxable. Stating that all investments in foreign currency-denominated instruments shall be subject to extensive due diligence by the PFA.
The guidelines noted that foreign currency pension Contributors shall be eligible to access pensions upon attaining the age of 50 years or on health grounds in accordance with the Regulation for the Administration of Retirement and Terminal Benefits. Adding that the foreign currency pension contributors shall receive their benefits in USD via Enbloc payment or Programmed Withdrawal.
Notwithstanding the above, the guidelines said the contributors who wish to receive retirement benefits in Naira can be allowed to do so.
